Episode 98: Working on Privacy

Bitcoin Dad Pod

Pre-Show

• Sparrow turns 3 today.
  • Public rls - Sep 1st 2020
• Sparrow Wallet v1.7.9: Wallet Accounts Summary Dialog & More

News

Drivechain Drama

• Michael Tidwell on X: "10 days ago, I tweeted on Drivechain's (DC) purpose and sidechains (SC). I've gained insights and I'll detail the 8 reasons I've seen that are against it. I will playfully denote people's names to various arguments even though these people are likely not the originators of the…" / X

• NVK GM 🌞⚡️: Shitcoin "new chains" are part of the scam marketi...

• People Pointing out Liquid has gone almost nowhere, still has issues

• What's a Bitcoin Drivechain and Why Are Devs At Odds Over Its Proposal? - Decrypt

• 💡 Drivechains, proposed by Paul Sztorc as BIP 300 and BIP 301, introduce native sidechains to Bitcoin, enabling additional features.

• 🔒 Sidechains are secured through blind merge mining, using Bitcoin's existing miners to secure other blockchains.

• 🛡️ Critics worry that drivechains may introduce complexity, security risks, and unwanted tokens (referred to as "shitcoins") into the Bitcoin ecosystem.

• 🔄 Drivechains do not require new assets; they can be used for Bitcoin-related purposes like private and scalable transactions.

• ⚙️ Some developers express concerns about the peg-out mechanism, which relies on users trusting 51% of Bitcoin's hashrate for an extended period.

• 💰 Miners are incentivized to keep drivechains active due to fee collection, but concerns remain about potential economic complications and trust issues.

• 🌐 Advocates believe that drivechains could enhance Bitcoin's competitiveness and eliminate the possibility of other cryptocurrencies surpassing it in the future.

Economics

• Arthur Hayes is back with a macro article on U.S. Federal Reserve policy errors

Privacy

• The actual U.S. Justice Department Tornado Cash indictment is amazing, it explains how ETH sort of works (WARNING USG PDF)
  • Roman and co raised money
    • maintained and hosted the TC UI
    • because the UI increases usage/anon set, its not just a small thing according to JD
    • TC had a relayer model to allow additoinal privacy and relayers earn fees
    • In August 2019 Roman and Co had control of the TC smart contract but removed their keys in May 2020
    • THe DAO they created in December 2020 created the TORN token and gave 30% to the TC founders and investors
    • The DAO token incentivized relayers to hold at least 300 tokens to get preferential access to fees
    • By blocking OFAC addresses from the UI they demonstrated they could have been compliant the entire time, thus were culpable (they were either way since they controlled the UI)
    • There's also a lot of internal communication about how they knew this would not be effective KYC/AML etc
• The indicment is still broad and bad...were they really opperating an unlicensed money transmitter? More like they were charging people to walk through a nice lobby to the MT rather than the complicated maze in the back

Tor is adopting Proof of Work

As an anti-DOS, denial of service feature, they have thought a long time about solutions to spam and are now using a solution shared by bitcoin

Energy

• The cambridge has been overestimating bitcoin carbon intensity by a lot

Turns out they were overestimating things by a noteable amount. They have updated their numbers downward.

• CCAF model overestimated by 16.8% in 2021, and 10.2% in 2022. This is in alignment with my previous research where I suggested earlier this year that their model was overestimating by 20.6% https://batcoinz.com/improving-our-estimate-of-bitcoin-energy-consumption/
• Clear evidence that GreenpeaceUSA's claim that Bitcoin used "as much energy as Sweden" was incorrect, and was based on CCAF historical overstatements
• CCAF say explicitly that based on new estimates: Bitcoin energy use is "comparable to ... tumble dryers in the US"
• CCAF have not yet revised their emissions estimates beyond the direct impact of revised energy consumption.

• They are still overestimating emissions by 67.6% due to emission intensity calculations that are both overestimated, and out-of-date (have not been updated since Jan 2022). This is an improvement upon the previous estimates which were out 106% (https://batcoinz.com/accurately-dynamically-calculating-bitcoin-network-emissions/)

• Bitcoin Mining In the Land of Fire and Ice - YouTube

Not only does Iceland run almost entirely on renewable energy, it has historically operated at a surplus. Bitcoin miners and other digital asset generators have been buying up that extra energy to power data centers across the island nation. But some environmentalists worry the exponential electricity demands of the controversial asset class will inevitably result in more power plants, which could damage Iceland’s unique ecosystems.

Bitcoin Education

• Bitcoin Optech reveals a lightning network vulnerability that drives home how experimental it is

Feedback

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Sponsors and Acknowledgements

Music by Lesfm from Pixabay
Self Hosted Show courtesy of Jupiter Broadcasting